EU funds 30 January 2024, 10:12am

Politico: Hungary would contribute to Ukraine's EU support in a special way

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A new compromise proposal from Brussels would take into account Hungary's long-held position that it will not supply arms to Ukraine, with Hungarian state money for the new Ukrainian arms purchase fund being spent on non-lethal weapons, Politico has learned from material it has obtained. In fact, under a further compromise advocated by the Germans, Hungary might not even pay its annual HUF 23 billion into the fund, but would directly assist Ukraine, and this could be deducted from the obligation to pay into the fund.

According to the newspaper's Tuesday morning Brussels Playbook newsletter, at the EU summit this Thursday, the leaders of the member states are preparing to reach an agreement on the Ukraine Facility, which will replace the European Peace Facility (EPF) with an annual €5 billion, to which the Hungarian government would also contribute with the aforementioned special deal. The Hungarian side had already indicated its willingness to do so at last Wednesday's meeting of ambassadors of the member states, which is why the compromise proposal has been prepared, the paper concludes.

An annual amount of HUF 23 billion would have to be paid into this fund, which would be used for non-lethal equipment for Ukraine.

Last week, Bloomberg and Der Spiegel both reported that a Hungarian government representative at Wednesday's ambassadorial meeting indicated an openness to the €5 billion fund so that not a single country would delay its establishment, but both times there was a vehement denial from the Foreign Ministry, saying that Hungary would not supply arms to Ukraine. The recent news could provide the explanation to resolve this apparent contradiction: that the Hungarian government would contribute to the fund, either by paying into it or by providing assistance to Ukraine on a bilateral basis, which could then be deducted from the EPF contribution, and that Hungarian money could only be used for non-lethal equipment. This would allow the Hungarian government to continue to claim that it is not supplying weapons to Ukraine, while still helping the neighbouring country.

Meanwhile, Politico reports that Berlin wants its "in-kind contributions" to Ukraine to be recognised. In essence, this would mean deducting from member states' contributions to the EPF those items that they have provided to Ukraine bilaterally, so that they do not have to make payments in both directions. This concession could even be used by Hungary to assist Ukraine on a bilateral basis.

The Ukraine Facility of €5 billion per year is not the same as the €50 billion financial package for Ukraine that the EU member states, except Hungary, are ready to provide. The latter was vetoed by Prime Minister Viktor Orban at the December EU summit. Yesterday, signals from Balázs Orbán, the Prime Minister's political director, and János Bóka, the minister responsible for EU affairs, suggested that the Hungarian government would agree to this common path, but would like to see an annual unanimous vote in the Council of member states on whether to make further payments to Ukraine. This could mean a potential Hungarian veto every year to extract other concessions (e.g. freeing up more Hungarian EU money), which is why many member states are not in favour of this at all.

It remains to be seen whether a compromise can be reached on this matter.

At Thursday's EU summit, the leaders of the member states will also decide on a third, broader issue: the mid-term review of the EU's 2021-2027 budget, which includes the €50 billion package for Ukraine over 4 years and the €5 billion Ukraine Arms Purchase Facility.

Cover photo: Getty Images